Thread by @matthewstoller

1. @ShaoulSussman and I wrote about a key scholar named Herb Hovenkamp. It's a story of how corporate power lives not in seedy politics, but in academia, in expert jargon, and in false histories about who we are written by those who distrust democracy. theguardian.com/commentisfree/…

2. Let's start with the Google and FB antitrust actions, which should be slam-dunk cases. Mark Zuckerberg de facto wrote in cited emails "let's do more crimes." Yet we hear from experts that corporate break-ups are hard, an uphill climb, etc. Why? nytimes.com/2020/12/10/tec…

3. First, modern leeriness of break-ups is profoundly weird and ahistorical. Corporate break-ups, as @RoryVanLoo observes, are not a big deal and are quite common. It's mostly just changing some legal documents. papers.ssrn.com/sol3/papers.cf…

4. Corporate break-ups are a key part of American history As historian @RrjohnR observes, the 19th century wasn't an era of 'laissez-faire,' that's a historical fallacy. It was an era of strict anti-monopoly rules.

https://twitter.com/RrjohnR/status/1337033297713635328

5. Just gaining a corporate charter was a huge deal, and corporations were strictly limited from veering outside of what states let them do. Americans jealously and explicitly guarded their liberties from aristocratic land and capital owners. Break-ups were far from radical.

6. When writing my book I noticed that break-ups were also common in the 20th century. Wright Patman helped break up 90+ banks in the 1970s. @linamkhan noted it happened in lots of sectors: TV, telephone, railroads, airlines, data processing, etc. papers.ssrn.com/sol3/papers.cf…

7. Today's technocratic philosophy This glosses over our anti-monopoly tradition. Thomas Jefferson, James Madison and Frederick Douglass opposed monopolies on political grounds, and states broke up companies almost as soon as they started issuing corporate charters.

7. These break-ups delivered the most productive, flexible, high-tech, democratic, equal, and high wage economy in human history. And then came the 1970s.

What happened to make the idea of changing some legal documents about who owns which assets appear super-radical?

8. The standard account is Robert Bork and the conservatives won the debate in the 1970s. But 'Bork did it' fails to explain a lot of what happened. Obama recently conceded he had been too soft on antitrust. nymag.com/intelligencer/…

9. Why did RBG and Stephen Breyer join Scalia in a Supreme Court decision in 2004 gutting antitrust by holding that the “charging of monopoly prices is not only not unlawful, it is an important element of the free-market system”?
law.cornell.edu/supct/html/02-…

10. The pro-monopoly bent in policy isn't a right-wing political plot. Sure, Republican politicians have expressed skepticism at break-ups, but even the 2020 Democratic platform says that regulators should only consider breaking up corporations “as a last resort.”

10. Lots of 'reformers' want regulation but not break-ups. Yale law prof @ProfFionasm wrote a piece last year titled "Why ‘breaking up’ big tech probably won’t work." She is an ex-Obama enforcer and parades as an antitrust reformer now. washingtonpost.com/opinions/2019/…

11. The key figure here is Hovenkamp, who wrote THE treatise on antitrust law. Breyer once said advocates would rather have “two paragraphs of [the] treatise on their side than three courts of appeals or four supreme court justices.” ilr.law.uiowa.edu/print/volume-1…

12. Hovenkamp was cited by the Supreme Court in 38 different cases, far more than Bork. Hovenkamp not from the right but from out of the Democratic establishment, taking over the treatise authorship from LBJ antitrust chief Don Turner and Harvard antitrust scholar Phil Areeda.

13. Hovenkamp was perhaps the most important influence on Obama's antitrust enforcers, validating bad merger after bad merger.

https://twitter.com/ronmknox/status/1337450575802327040

14. And last year, with regards to big tech, he said "breakup remedies are radical and they frequently have unintended consequences." He warned that “judges aren’t good at breaking up companies.” variety.com/2019/digital/n…

15. Hovenkamp is an intellectual historian by training, and his views on antitrust policy are situated in a misleading narrative. He argues Americans never had a problem with big corporations, or even monopolies. The Sherman Act targeted only predatory behavior. He is wrong.

16. Senator Sherman himself explained that the purpose of the Federal antitrust act was “to put an end to great aggregations of capital because of the helplessness of the individual before them.” theguardian.com/commentisfree/…

17. Until the 1960s, such a view was widespread. The Supreme Court in decisions such as Alcoa in 1945 recognized that merely being a monopoly was illegal, regardless of efficiency or economic jargon.

18. Bork attacked this notion. But Hovenkamp's scholarship provided the foundation for the Dem antitrust experts to accept Bork's ideological contention that antitrust should be a technical area without broader democratic goals.

19. Hovenkamp and many of the antitrust Dems challenge Bork-influenced libertarians over certain methodological questions but accepted the libertarian project. The short-hand for this libertarian vision is the Orwellian term consumer welfare standard, which Hovenkamp defends.

20. And yet at heart, these are reactionary ideas. Hovenkamp, who for decades resisted any action to reign in large technology firms, argued a year ago that breaking up these giants would send the economy back to “the Stone Age.” theguardian.com/commentisfree/…

21. This week, reversing his position, Hovenkamp conceded that breaking up Facebook is now warranted – revealing his entire school of thought as largely a reactionary force torn between bending to concentrated finance and scandalous headlines of abusive market power.

22. But Hovenkamp did his damage. He has trained hundreds of Dem and GOP judges and experts to disdain democratic controls over political economy, to instead trust experts who use expensive speculative and unwieldy pretend models.

23. And that is why emails from Zuckerberg saying 'let's do the crimes by illegally buying rivals' aren't enough to split apart the company, even though they obviously should be. theguardian.com/commentisfree/…

24. The resistance to restoring our anti-monopoly tradition runs much deeper than Robert Bork and his legacy. It's just as entrenched within academic and judicial citadels of well-meaning technocrats who carry an ingrained fear of too much democratic influence over the economy.

25. Last point. Policymakers and judges are going to have to shake-off the misleading narrative spun by the current antitrust establishment and Herb Hovenkamp. Doing so is essential not only for supporting fair markets, but for preserving democracy itself.